March 04, 2011, 2:54 PM EST
By Pham-Duy Nguyen
March 4 (Bloomberg) -- Gold rose as mounting tensions in Libya boosted the appeal of the precious metal as an investment haven. Silver toped $35 an ounce, extending a rally to the highest in 31 years.
Libyan opposition leaders rejected a mediation offer by Venezuelan President Hugo Chavez as armed rebels fought for control of crude-oil ports on the central and eastern coastal strip. Gold climbed for the sixth straight week, the longest rally since September 2007. On March 2, the metal reached a record of $1,441 an ounce.
“There are still a lot of moving parts in the Middle East and North Africa,” said Adam Klopfenstein, a senior strategist at Lind-Waldock in Chicago. “People want to be long gold and silver going into a weekend where’s there’s a lot of macro risk in the market.”
Gold futures for April delivery rose $12.20, or 0.9 percent, to settle at $1,428.60 an ounce at 1:41 p.m. on the Comex in New York. The metal rose 1.4 percent this week.
Silver futures for May delivery jumped $1, or 2.9 percent, to $35.327. Earlier, the price reached $35.405, the highest since March 1980. In that year, the metal reached a record $50.35.
This week, silver gained 7.3 percent, the sixth straight increase. That marked the longest rally since March 2008.
Increasing food prices contributed to unrest that toppled leaders in Tunisia and Egypt, and protests erupted in Yemen, Bahrain, Oman, Algeria, Iran and Iraq. Gold slumped 6.1 percent in January and has climbed 7.1 percent since then.
‘Reverse Their View’
“People who were bearish on gold have really had to reverse their view given all of the activity in the Middle East and Northern Africa,” said William Rhind, the head of U.S. sales and marketing at ETF Securities in New York.
European Central Bank President Jean-Claude Trichet said yesterday that borrowing costs may rise next month for the first time in almost three years. Crude oil has topped $100 a barrel, and global food costs climbed to a record last month, according to a United Nations index.
“Being long gold is hedging against the inflationary implications of higher oil prices,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago.
Palladium futures for June delivery fell $5, or 0.6 percent, to $809.80 an ounce on the New York Mercantile Exchange. The price, up 2.8 percent this week, has jumped 75 percent in the past 12 months.
Platinum futures for April delivery rose $4.90, or 0.3 percent, to $1,837.90 an ounce. The metal, up 1.9 percent this week, has climbed 16 percent in the past year.
--With assistance from Yi Tian in New York and Nicholas Larkin in London. Editors: Patrick McKiernan, Millie Munshi
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at firstname.lastname@example.org
To contact the editor responsible for this story: Patrick McKiernan at email@example.com
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